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Homework answers / question archive / The faster a firm's growth in sales, the more likely it is that an increasing percentage of financing will be internally generated

The faster a firm's growth in sales, the more likely it is that an increasing percentage of financing will be internally generated

Finance

The faster a firm's growth in sales, the more likely it is that an increasing percentage of financing will be internally generated. True or false?

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True

Financing refers to the process of managing money. It comprises of operations like saving, allocating, depositing, borrowing, and estimating.

The increase in sales growth leads to increased revenue generation. If the organization is continuously increasing its sales growth, management can easily use the profits for future expenses like purchasing raw material, additional equipment and labor costs.

Therefore, the organization will not need any external financing; the profit earned can be utilized for the same.